Quick Approval of Trade Agreements is Good News for the American Economy

October 12, 2011

Francisco J. Sánchez is the Under Secretary of Commerce for International Trade

Earlier tonight, the millions of Americans concerned about jobs got some good news: Congress approved trade agreements with Korea, Colombia and Panama.

It’s been a long journey to this moment, so let me cut right to the chase: Opening new doors of opportunity for U.S. firms to sell their products in these three markets will strengthen our economy and sharpen our competitive edge in the global economy.

It will also support jobs.

Ford Motor Company employees at the Michigan Assembly Plant in Wayne, MI assemble a 2012 Ford Focus, one of the vehicles targeted for the Korean market under the U.S.-Korea Trade Agreement. Photo by: Sam VarnHagen/Ford Motor Co. Used with permission.

For every billion in U.S. goods exported overseas, more than 5500 jobs are supported here at home. In total, the three agreements will support tens of thousands of jobs and add billions to the U.S. GDP — reasons for all Americans to cheer.

I commend President Obama for his leadership in creating a balanced trade agenda. He has worked tirelessly to get the best possible deal for businesses and workers. Congress also deserves credit. These measures were passed with bipartisan support. That both parties were able to find common ground on these issues speaks to positive economic impact that these agreements will have on communities across the nation.

I also applaud the President and Congress for renewing the Trade Adjustment Assistance program. Why? Because whenever there is change, there are some who are negatively impacted; some Americans, through no fault of their own, have lost their jobs because of foreign competition. But all is not lost: TAA will help them retrain and retool for success in the 21st century economy.

The world is rapidly changing, and we must change with it to succeed in this economic environment. That’s why these three trade agreements are so important; they’ll create new opportunities across all regions and sectors. Take the auto industry, historically a backbone of the middle class:

In 2010, the U.S. exported approximately $1.5 billion in vehicles and parts to the three prospective markets despite facing relatively high average tariffs. Because the agreements have passed, the tariffs on these products will ultimately fall to zero, expanding opportunities for growth in exports for U.S. companies.

This is a big deal. As President Obama said in his speech to Congress outlining the American Jobs Act:

“If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers. I want to see more products sold around the world stamped with three proud words: “Made in America.”

With the passage of these three trade agreements, chances are we will indeed see more U.S. products sold around the world. That’s a victory for us all.

All trade trade agreements have a bounce on effect, in general it will be like a pebble in a pond, more work, more employement and more our sourced spending, share the money about is essential for a healthy economy.